The Biggest Gamble of Your Life
Home sales are rising and prices are still high. From Toronto to Los Angeles to Boston, buyers are about to jump on the opportunity to own their own home. Yet a home or condo priced $300,000 to $1 million is a major personal commitment.
If you make a mistake and buy a money pit, dislike your neighbors and neighborhood, or tire of being house poor, you’re in it for real. Given fast rising rents however and the ability to lock in at low 30 year fixed mortgage rates, buying is a pretty good investment.
All you have to do is avoid a big mistake. Because big mistakes mean thousands and thousands of dollars, or more. You’re doing your house hunting this spring, but is the roof and foundation of the home okay? What local bylaws and taxes are in the works? Will the A/C and furnace give out in a few years? Is there wood rot and damage in the windows? How’s the ventilation and insulation?
Here’s the key matter: are you paying too much for this house? Can you talk the seller down in a way?
You’re Better off with a Realtor
A licensed and insured Realtor offers protection from contract snafus, misrepresentation, speed up your home search, beat other buyers, and handling all the paperwork.
Using a Realtor speeds up the process of getting the home you want. They’re experienced at helping buyers find and acquire the home they actually want. They can be a good sounding board for doubts and risky purchases.
See Realtor.com’s top reasons to hire a Realtor.
The realtor/bank/buying agent represent a triangle of safety. Licensed Realtors don’t just handle the paperwork, they’re looking out for your best interests.
If you’re considering buying a property, there’s way more risk. The housing market has more listings, but are there homes that make a good purchase. There’s a lot of buyers ready to jump off the fence and buy because housing stock is limited. You could be buying into something horrible with pitfalls you didn’t even know existed. And we’re talking way more than knob and tube wiring, wood rot, and cracked foundations.
You’re on Your Own – Hope it All Works Out Okay
You probably thought your “Honest Abe” home inspector was sufficient to cover an examination of the property and warn you of dangers, but there’s lots of stories of home inspectors that didn’t do their jobs or who countered that they can only do so much to assess a property (and they’re covered legally).
When you’re signing to purchase a house and sign a mortgage to boot, that’s a scary moment, especially if you’re a first time buyer and you’re involved in a bidding war. But no one can forecast about a specific property in your city – except maybe a realtor.
10 Home Buyer Pitfalls that Could Ruin Your Year
Here’s some of the major pitfalls your Realtor could spare you from:
- being too emotionally involved and nervous means you may lose your objectivity and the selling agent could exploit your situation (that could translate to 10’s of thousands of dollars)
- you don’t know what the seller’s obligations are in disclosing the state of the property
- selling agent knows you aren’t knowledgeable and takes advantage of your naivete
- you don’t have someone with a strong residential real estate background to advise you about the real value of the house or what could happen with a duplex or fourplex
- saves you from buying a money pit – you see it all the time on HGTV when they open up the walls of the houses they bought – in a sellers market you may even consider buying as is. You won’t have Mike Holmes around to “make it right.” The realtor focused on homes available on the MLS System.
- you wander aimlessly looking at homes that don’t meet your criteria
- you have no one to help you negotiate the best terms of a purchase – you end up getting kicked around because there are so many competing buyers
- you aren’t sure what’s in store for the neighbourhood, what it’s really like, and what taxes might be looming in years ahead
- you consider buying a pre-construction condo even they could go bankrupt taking all your money with them
- Was the house a grow op, did the owners smoke, when will the roof need to be replaced, and are the neighbour’s unpleasant, and did the current owners meet all the zoning bylaws?
There’s more dangers than these 10 of course. I hope you keep your eye on the big picture when you’re spending $300 to $1 million on a home. You could fall into a situation that could end your marriage, take your money and health, and push you into bankruptcy.
Buying a home is serious business. Don’t ever go it alone just because you can find info online. Yes, people are excited about the Uberization of real estate, but their enthusiasm will undergo some tempering when it actually happens. There will be some horror stories.